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Wednesday, September 20, 2006

Why Do Texas Intruments And Samsung Disagree On Cells?

Stocks: (TXN)(NOK)

Texas Instruments recently said it would come in on the lower side of its revenue forecasts for the next quarter. Slowing chips sales for cell phones seemed the be the culprit.

But, Samsung says that global sales of handsets this year will be 950 million, not the 900 million it had forecast earlier in the year.

Both companies cannot be right, and it raises the issue of whether TI expects to lose share in the cell chip market and is simply not stating that outright.

Nokia, one of TI's largest customers, have not mentioned a slowdown either, but if TI's sales activity in cell chips is off, Nokia may be having share problems as well.

A slowdown in cell chip shipments could be tough on TI's share price. Since late July, the stock has moved from $26.77 to just under $32. But, the stock has not moved up from there.

Maybe the market is concerned about the details in TI's next 10-Q.

Douglas A. McIntyre can be reached at He does not own securities in companies that he writes about.

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